Apple could make history tomorrow with its biggest second-quarter sales yet, though it's also expected to log its first decline in profit in 10 years.

That's what analysts anticipate in Tuesday's second-quarter earnings report, which will spell out the company's performance through the end of March.

Wall Street is expecting Apple to post earnings of $10.12 per share on sales of $42.6 billion, based on a poll of 48 analysts from Thomson First Call. That's down from earnings of $12.30 per share, and up from the $39.2 billion in sales from the same quarter a year ago.

Decline in profit aside, the revenue both Apple and analysts are expecting would be a new second-quarter record. Wall Street expects that to be led by sales of around 35 million iPhones and 17 million iPads -- the company's two most popular products, both of which were revamped last fall. Trailing those, analysts believe Apple sold a little more than 4 million Macs, fueled by shoppers catching up on purchases of the latest iMac, which was in short supply at the end of last year.

One of the key reasons a decline in profit is expected is Apple's gross margins, the amount of money it makes on its products. In January, the company estimated a gross margin of between 37.5 percent and 38.5 percent for the quarter. At best, that margin is about the same as Apple's last quarter, but a steep drop from the 47.4 percent it reported a year ago. During a previous earnings call, Apple noted that some of this was due to the iPad Mini having tighter margins, as well as a weaker dollar, but that things could improve as the company brings down costs.

Apple's stock since its high in September 2012 (click to enlarge).
Yahoo

Shares of Apple have dropped 44 percent since reaching a high of $702.11 seven months ago, bringing the company's stock price down to territory it hasn't seen since December 2011. During a meeting with shareholders in February, Apple CEO Tim Cook noted that he was not happy with the stock's performance, but said the company was focused on the long term and making the very best products. That was after pressure from an outside shareholder urging Apple to sweeten the deal for current shareholders with a plan to dole out fixed, recurring dividends that could be traded separately from Apple's stock.

Of note, this quarter will be the first since Apple changed the way it estimates its earnings. The company was well-known for comically lowballing its forecast, something that became more of an issue after a string of record-setting blowouts fueled by the iPhone and later the iPad. Apple went nearly a decade without posting a miss, a party that ended in October 2011 when Apple sold less iPhones than expected, due to a longer than usual wait between models. More recently, the companyjust barely missed Wall Street's revenue estimates for its December quarter, though beat expectations on profits and set new sales records for its products.

During its last conference call with analysts, Apple CFO Peter Oppenheimer noted that the company was moving from a set number to a "range of guidance that reflects our belief of what we are likely to achieve."

Some other things to pay attention to on the post-earnings conference call with analysts:

The big delay between product launches. Apple's last big product unveiling was last October, with the iPad Mini. It's been very quiet since then, short of Apple tweaking its high-end MacBook Pro models.

Dividend talk. Apple's cash pile continues to grow, and at last count it was a little more than $137 billion. Apple already has a dividend and stock repurchase plan, but has said it's in discussions about how to return more cash to shareholders. In a note to investors last week, Sanford Bernstein analyst Toni Sacconaghi said not to hold your breath for news about this during Apple's conference call, but you can bet someone's going to ask for a progress report.

Rumors, rumors, rumors. Expect analysts to ask questions about things Apple won't answer. That includes talk of a new iPhone just around the corner, and whether it's buying audio chips from someone other than Cirrus Logic, a company that last week trimmed sales estimates based on "a decreased forecast for a high-volume product"believed to be from Apple, which uses the chips in iOS devices.

China fallout. Apple was recently the target of a national campaign in China to improve its warranty practices in the region. The company eventually apologized, and promised to change its ways, including improvements. Analysts could be curious how much of an impact that's having on its business there.

Apple will report just after the market closes on Tuesday, followed by a conference call with executives at 2 p.m. PT. CNET will have all the relevant news from both, so stay tuned.

About the author

Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
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